diff --git a/xds/src/main/java/io/grpc/xds/client/XdsClientImpl.java b/xds/src/main/java/io/grpc/xds/client/XdsClientImpl.java
index d3384cbbe4e..4c6823f844a 100644
--- a/xds/src/main/java/io/grpc/xds/client/XdsClientImpl.java
+++ b/xds/src/main/java/io/grpc/xds/client/XdsClientImpl.java
@@ -676,6 +676,8 @@ private final class ResourceSubscriber<T extends ResourceUpdate> {
     private ResourceMetadata metadata;
     @Nullable
     private String errorDescription;
+    @Nullable
+    private Status lastError;
 
     ResourceSubscriber(XdsResourceType<T> type, String resource) {
       syncContext.throwIfNotInThisSynchronizationContext();
@@ -712,11 +714,16 @@ void addWatcher(ResourceWatcher<T> watcher, Executor watcherExecutor) {
       watchers.put(watcher, watcherExecutor);
       T savedData = data;
       boolean savedAbsent = absent;
+      Status savedError = lastError;
       watcherExecutor.execute(() -> {
         if (errorDescription != null) {
           watcher.onError(Status.INVALID_ARGUMENT.withDescription(errorDescription));
           return;
         }
+        if (savedError != null) {
+          watcher.onError(savedError);
+          return;
+        }
         if (savedData != null) {
           notifyWatcher(watcher, savedData);
         } else if (savedAbsent) {
@@ -808,6 +815,7 @@ void onData(ParsedResource<T> parsedResource, String version, long updateTime,
       this.metadata = ResourceMetadata
           .newResourceMetadataAcked(parsedResource.getRawResource(), version, updateTime);
       absent = false;
+      lastError = null;
       if (resourceDeletionIgnored) {
         logger.log(XdsLogLevel.FORCE_INFO, "xds server {0}: server returned new version "
                 + "of resource for which we previously ignored a deletion: type {1} name {2}",
@@ -857,6 +865,7 @@ void onAbsent(@Nullable ProcessingTracker processingTracker, ServerInfo serverIn
       if (!absent) {
         data = null;
         absent = true;
+        lastError = null;
         metadata = serverInfo.resourceTimerIsTransientError()
             ? ResourceMetadata.newResourceMetadataTimeout()
             : ResourceMetadata.newResourceMetadataDoesNotExist();
@@ -894,6 +903,7 @@ void onError(Status error, @Nullable ProcessingTracker tracker) {
       Status errorAugmented = Status.fromCode(error.getCode())
           .withDescription(description + "nodeID: " + bootstrapInfo.node().getId())
           .withCause(error.getCause());
+      this.lastError = errorAugmented;
 
       for (ResourceWatcher<T> watcher : watchers.keySet()) {
         if (tracker != null) {
diff --git a/xds/src/test/java/io/grpc/xds/GrpcXdsClientImplTestBase.java b/xds/src/test/java/io/grpc/xds/GrpcXdsClientImplTestBase.java
index 89668485b96..19266b0d289 100644
--- a/xds/src/test/java/io/grpc/xds/GrpcXdsClientImplTestBase.java
+++ b/xds/src/test/java/io/grpc/xds/GrpcXdsClientImplTestBase.java
@@ -285,6 +285,8 @@ public long currentTimeNanos() {
   @Mock
   private ResourceWatcher<LdsUpdate> ldsResourceWatcher;
   @Mock
+  private ResourceWatcher<LdsUpdate> ldsResourceWatcher2;
+  @Mock
   private ResourceWatcher<RdsUpdate> rdsResourceWatcher;
   @Mock
   private ResourceWatcher<CdsUpdate> cdsResourceWatcher;
@@ -694,6 +696,24 @@ public void ldsResourceUpdated_withXdstpResourceName_withUnknownAuthority() {
     assertThat(resourceDiscoveryCalls.poll()).isNull();
   }
 
+  @Test
+  public void ldsResource_onError_cachedForNewWatcher() {
+    xdsClient.watchXdsResource(XdsListenerResource.getInstance(), LDS_RESOURCE,
+        ldsResourceWatcher);
+    DiscoveryRpcCall call = resourceDiscoveryCalls.poll();
+    call.sendCompleted();
+    verify(ldsResourceWatcher).onError(errorCaptor.capture());
+    Status initialError = errorCaptor.getValue();
+    xdsClient.watchXdsResource(XdsListenerResource.getInstance(), LDS_RESOURCE,
+        ldsResourceWatcher2);
+    ArgumentCaptor<Status> secondErrorCaptor = ArgumentCaptor.forClass(Status.class);
+    verify(ldsResourceWatcher2).onError(secondErrorCaptor.capture());
+    Status cachedError = secondErrorCaptor.getValue();
+
+    assertThat(cachedError).isEqualTo(initialError);
+    assertThat(resourceDiscoveryCalls.poll()).isNull();
+  }
+
   @Test
   public void ldsResponseErrorHandling_allResourcesFailedUnpack() {
     DiscoveryRpcCall call = startResourceWatcher(XdsListenerResource.getInstance(), LDS_RESOURCE,